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Bounce: Driver Compensation Innovation

by Roger Lanctot | Nov 08, 2018

There’s a new kid on the rideshare block, Bounce, which is rewriting the rules of driver compensation. In fact, the company’s compensation innovation could well give the firm enough momentum to take on the titans in the space – Uber and Lyft. I feel this way because something has long been missing from driver compensation: a piece of the action.

Riding home from the airport two weeks ago my Lyft driver, my second driver selection, explained how I ended up with him after my first driver called me to ask where I was going and likely opted not to pick me up because my ride would be too short. This second driver further explained how he often waits for hours for a fare, which would explain why a Lyft driver might not want a short ride and a corresponding low fare after such a long wait.

But the conversation deepened when it turned out that my Lyft driver was a former driver for the taxi operator that owns the franchise relationship at the airport. Those drivers face the same hours-long waits for sometimes-short rides and, obviously, don’t have the option of rejecting rides since they have no control over the curbside dispatching.

What was most interesting, though, was my driver’s description of his decision to stop driving for that taxi company and start driving for Uber, originally, and now for Lyft. He’d been driving for the company for more than a decade but was increasingly frustrated with the compensation. He saw Uber as a potentially better way to make a living.

The revelation, for him and me, came when he let the taxi company know he’d be driving for Uber. The company told him to be careful because if he left them and drove for Uber he would not be able to return to the company.

This attempt at intimidation was meaningless to this driver. The only manipulative tool the taxi company had at its disposal was the threat of a permanent ban. What was missing was any form of long-term compensation or reward for sticking around.

I asked him if there was any advantage to his having worked for the company for more than 10 years. Not only was there no reward in terms of higher compensation, better benefits, stock options or bonuses, he actually made too much money driving for the taxi company to qualify for Obamacare subsidies.

By shifting to Uber he immediately qualified, as his reported monthly income was now below the threshold. Unfortunately, he quickly discovered that driving for Uber had its own shortcomings, which included Uber’s failure to pass along tips given by his passengers. It wasn’t long before he shifted over to Lyft as a result.

It was with this experience in mind that I read The Rideshare Guy’s report on Bounce. You can find that report here: https://therideshareguy.com/bounce-rideshare/

I won’t go into the details, which are available in the report, but the bottom line is that Bounce rewards drivers for recruiting other drivers (as long as they actually drive) and for recruiting passengers/customers. More importantly, it provides a means of vesting in stock options over a 25-month period at 1/25th of the value per month – as long as certain usage thresholds are met.

This is precisely what is missing from the compensation plans of taxi, Uber and Lyft drivers. It’s no wonder there is so much turnover and so many complaints.

Bounce has the potential to disrupt these market leaders and rewire driver compensation around the world. Therideshareguy description of the service and its compensation plan is worth the read and, no, it’s not a pyramid scheme. It represents real innovation and a way to reward committed drivers and frequent passengers. But, beware drivers (and good news, passengers), there is no surge pricing. I’m liking it more and more all the time.

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